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#1814560 - 05/15/13 06:41 PM Content coverage - commercial builder lines
Ninky Offline
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Ninky
Joined: Nov 2002
Posts: 357
Our attorney has removed the standard clause in our commercial real estate documents (Deed of Trust) that automatically included inventory and moveable property as collateral. This eliminated the process of having to always get flood content coverage in addition to the standard flood coverage on all commercial real estate loans. The one exception is on builder lines. Can anyone share what their practice is in this regard on their builder-line loan documentation? Are other banks automatically including inventory and moveable property in their documentation, thus automtically requiring content coverage on builder lines? Trying to determine what the industry practice is.
Thanks to anyone willing to share.

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Flood Compliance
#1814574 - 05/15/13 06:55 PM Re: Content coverage - commercial builder lines Ninky
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,235
Galveston, TX
I don't believe in most States you can attach inventory and moveable property as collateral through a Deed of Trust alone, can you???? Don't you need to file a UCC?
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#1814677 - 05/15/13 08:39 PM Re: Content coverage - commercial builder lines Ninky
Ninky Offline
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Ninky
Joined: Nov 2002
Posts: 357

We are filing a UCC and the deed of trust includes a security agreement covering those items of personal property.

Do you know how others document these lines? If they always include the inventory and moveable property as standard practice?

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#1814688 - 05/15/13 08:49 PM Re: Content coverage - commercial builder lines Ninky
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,235
Galveston, TX
It depends on whether from a credit underwriting perspective they think they need them or not. Even then, some banks routinely take such a blanket lien and some do not. I think you will find it all over the board.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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